HUD HCV Guidebook § 2

The term Fair Market Rents (FMRs) refers to metropolitan area/non-metropolitan county and small area FMRs
(SAFMRs). In the HCV program, the FMR is the basis for determining the “payment standard amount,” which
is the maximum monthly subsidy payment for a voucher household.5 HUD establishes FMRs for different
geographic areas and calculates FMRs for all non-metropolitan counties and metropolitan areas.6 Generally,
the FMR for an area is the amount that would be needed to pay the gross rent (shelter rent plus utilities) of
privately owned, decent, and safe rental housing of a modest (non-luxury) nature with suitable amenities.7
Both types of FMRs are calculated annually by HUD’s Office of Policy Development and Research (PD&R) and
published in the Federal Register (FR) with an effective date of October 1st. HUD also makes them available
through the HUD User Web site.8 FMRs are established based on the 40th percentile of rents charged for
standard rental housing in the FMR area.
HUD delineates metropolitan area/non-metropolitan county FMRs and small area FMRs differently, as
described below:
       •    Metropolitan area/non-metropolitan county FMRs. For the purpose of delineating metropolitan
            area FMRs, HUD uses the metropolitan areas established by the Office of Management and
            Budget (OMB), and in some instances, subdivides OMB’s defined metropolitan areas into smaller
            HUD Metropolitan Fair Market Rent Areas (HMFAs) along historical metropolitan boundaries to
            preserve continuity of FMR estimates. HUD also establishes FMRs for all non-metropolitan
            counties.
       •    Small area FMRs. HUD establishes SAFMRs at the ZIP Code level. SAFMRs are intended to result
            in payment standards that align more closely with local rental costs, particularly in higher-cost
            areas. HUD adopted SAFMRs via a Final Rule published on November 16, 2016, for the express
            purpose of providing HCV-assisted families with access to “areas of high opportunity and lower
            poverty.” Starting in FY 2025, HUD began publishing SAFMRs for non-metropolitan counties, in
            addition to metropolitan areas. Along with the guidance provided in this chapter, HUD has a

4
  24 CFR 982.54(d)(14)(i)
5
  24 CFR 982.505(a)
6
  24 CFR 888.113(d)
7
  24 CFR 888.111(b). In addition, all rents subsidized under the HCV program must meet rent reasonableness
standards. Rent
reasonableness is determined by PHAs with reference to rents for comparable unassisted units.
8
  https://www.huduser.gov/portal/datasets/fmr.html

dedicated webpage on SAFMRs, which can be found at:
            https://www.hud.gov/program_offices/public_indian_housing/programs/hcv/safmr
Within each of these FMR areas, the applicable FMR for the HCV program is:9
       •    The HUD-published SAFMR;
       •    The HUD-published metropolitan FMR for any other metropolitan area;10 or
       •    The HUD-published non-metropolitan county FMR for any other non-metropolitan county.11
Please note that program regulations at 24 CFR 982.503 refer to the “applicable FMR” on numerous
occasions. It is important to understand that the “applicable FMR” will be the HUD published SAFMR for PHAs
in mandatory SAFMR areas12 or for those PHAs that have opted-in to using the SAFMR.13